June 1 marked twenty-five years since Presidential assent was granted to the 74th Constitutional Amendment.
Has urban governance in India lived up to the vision of empowered institutions of local self-governance.

It has been 25 years since Presidential assent was granted to the 74th Constitutional Amendment Act. This Constitutional Amendment, also known as Nagarpalika Act, came into force on 1st June 1993. It gave constitutional status to democratically elected urban local bodies in Section IXA of the Indian constitution. Within a year of this amendment, all state legislatures passed conformity legislations, with a list of mandated functions which became the responsibility of these urban institutions of local self-governance.

Over 4,000 constitutional institutions of urban local self-governance with democratically elected people’s representatives exist in the country today. The larger ones are called municipal corporations, now numbering about 250. These are generally in large cities (and other metros) with half a million population. Nearly 1,700 smaller ones (in urban centres with populations ranging around 100,000) are called municipal councils or nagar palikas. The remaining are much smaller elected bodies called nagar panchayats (in centres with 20-50,000 population).

Despite a constitutional mandate, governance of urban habitats by these democratically elected local bodies has not measurably improved the conditions in India’s cities. Traffic congestion, water crisis, poor sanitation, increasing crime and unaffordable housing characterise urban living in India today. According to a recent UN report, 14 of the 15 most polluted cities in the w.orld are in India. My hometown Kanpur is the most polluted and dirty!

Cities have been ‘allowed’ to deteriorate despite the recognition of rapid urbanisation and increase in economic contribution of urban centres. Policy analysts in Niti Aayog, private investors and academics all repeatedly pronounce the urgent need to make our cities efficient, ‘liveable’, safe, vibrant and ‘smart’. Yet, improvements in and implementation of constitutional mandates for urban governance do not move at required pace.

The Constitution of India, in Section IXA, mandates state governments to devolve functions, funds and functionaries to elected urban bodies so that they can perform their roles effectively. Needless to say, such devolution has not happened adequately. The basic reason for this is lack of structured devolution of authority and lack of investment in building human and institutional capacities in urban local bodies. Chhattisgarh, Bihar, Himachal Pradesh, Assam, J&K, Arunachal Pradesh remain laggards in devolution of functions, funds and functionaries.

Despite additional and targeted allocations from 13th and 14th Finance Commissions, systematic planned investments in capacity improvements have not materialised. Countrywide, urban local bodies generate less than a third of their own revenue. Uttar Pradesh, Chandigarh, Himachal Pradesh and Manipur have lowest proportion of own revenues to total receipts (less than 25%). Political support and capacity for revenue generation is lacking, except in some southern and western states such as Goa, Andhra Pradesh and Gujarat which have highest proportion of own revenues to total receipts (more than 48%). Higher proportion of own sources is a good indicator of systematic revenue generation.

Organisational systems and procedures in urban local bodies have not been modernised in line with the constitutional mandate given 25 years ago. In fact, in several states like Bihar, J&K, Assam, Chhattisgarh and Nagaland, these bodies have limited adoption of double-entry financial management systems. Accounting on accrual basis, a universal standard, has escaped urban local bodies in many states.

Institutional support mechanisms for ongoing capacity development of elected representatives in urban local bodies do not exist in most states; their rural counterparts in panchayats have had the support of National and State Institutes of Rural Development (NIRD and SIRDs).

As pressures to undertake urban infrastructure development grows, national and state governments announce and promote short-term solutions of creating urban development and finance corporations and Smart City Special Purpose Vehicles. Such ‘parallel’ bodies, administered by appointed officials, further weaken institutional capacities and mandates of elected urban local bodies.

The future of ‘happy’ cities requires that elected urban local bodies must be empowered and their institutional and human capacities sufficiently strengthened. Such an ‘upstream investment’ is critical for infrastructure investment to become attractive in urbanising India. It is not enough to improve ease of doing business at the national level; similar ease is necessary at city level to improve delivery of basic services and to attract fresh investment in order to upgrade urban infrastructure across the country.

Practical and imperative steps to empower elected city governments must be taken by all state governments. New national programmes like Smart City and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) need to be leveraged to undertake urgent, methodical efforts towards empowerment and development of elected institutions of urban governance. The Prime Minister must take a lead in this, evolving a political consensus between central and state governments towards making cities an integral part of vibrant New India.